,i #aafth ,,congress #ast ,session ,h4 ,r4 #cgfh ,,in ,,the ,,house ,,of ,,representatives ,july #af1 #bjai,mr4 ,budd introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to amend the ,securities ,exchange ,act of #aicd to create a safe harbor for finders and private placement brokers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,unlocking ,capital for ,small ,businesses ,act of #bjai4 #b4 ,safe harbors for private placement brokers and finders 7a7 ,in general ,section #ae of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gho7 is amended by adding at the end the following3 7p7 ,private placement broker safe harbor 7#a7 ,registration requirements ,not later than #ahj days after the date of the enactment of this subsection the ,commission shall promulgate regulations with respect to private placement brokers that are no more stringent than those imposed on funding portals4 7#b7 ,national securities associations ,not later than #ahj days after the date of the enactment of this subsection the ,commission shall promulgate regulations that require the rules of any national securities association to allow a private placement broker to become a member of such national securities association subject to reduced membership requirements consistent with this subsection4 7#c7 ,disclosures required ,before effecting a transaction1 a private placement broker shall disclose clearly and conspicuously1 in writing1 to all parties to the transaction as a result of the broker's activities-- 7,a7 that the broker is acting as a private placement broker2 7,b7 the amount of any payment or anticipated payment for services rendered as a private placement broker in connection with such transaction2 7,c7 the person to whom any such payment is made2 7,d7 any beneficial interest in the issuer1 direct or indirect1 of the private placement broker1 of a member of the immediate family of the private placement broker1 of an associated person of the private placement broker1 or of a member of the immediate family of such associated person4 7#d7 ,private placement broker defined ,in this subsection1 the term private placement broker means a person that-- 7,a7 receives transaction-based compensation-- 7i7 for effecting a transaction by-- 7,i7 introducing an issuer of securities and a buyer of such securities in connection with the sale of a business effected as the sale of securities2 or 7,,ii7 introducing an issuer of securities and a buyer of such securities in connection with the placement of securities in transactions that are exempt from registration requirements under the ,securities ,act of #aicc2 and 7ii7 that is not with respect to-- 7,i7 a class of publicly traded securities2 7,,ii7 the securities of an investment company 7as defined in section #c of the ,investment ,company ,act of #aidj72 or 7,,iii7 a variable or equity-indexed annuity or other variable or equity-indexed life insurance product2 7,b7 with respect to a transaction for which such transaction-based compensation is received-- 7i7 does not handle or take possession of the funds or securities2 and 7ii7 does not engage in an activity that requires registration as an investment adviser under ,state or ,federal law2 and 7,c7 is not a finder as defined under subsection 7q74 7q7 ,finder safe harbor 7#a7 ,nonregistration ,a finder is exempt from the registration requirements of this ,act4 7#b7 ,national securities associations ,a finder shall not be required to become a member of any national securities association4 7#c7 ,finder defined ,in this subsection1 the term finder means a person described in paragraphs 7,a7 and 7,b7 of subsection 7p77#d7 that-- 7,a7 receives transaction-based compensation of equal to or less than #ejj1jjj in any calendar year2 7,b7 receives transaction-based compensation in connection with transactions that result in a single issuer selling securities valued at equal to or less than #ae million in any calendar year2 7,c7 receives transaction-based compensation in connection with transactions that result in any combination of issuers selling securities valued at equal to or less than #cj million in any calendar year2 or 7,d7 receives transaction-based compensation in connection with fewer than #af transactions that are not part of the same offering or are otherwise unrelated in any calendar year4 4 7b7 ,validity of contracts with registered private placement brokers and finders ,section #bi of the ,securities ,exchange ,act 7#ae ,u4,s4,c4 #gh;cc7 is amended by adding at the end the following3 7d7 ,subsection 7b7 shall not apply to a contract made for a transaction if-- 7#a7 the transaction is one in which the issuer engaged the services of a broker or dealer that is not registered under this ,act with respect to such transaction2 7#b7 such issuer received a self-certification from such broker or dealer certifying that such broker or dealer is a registered private placement broker under section #ae7p7 or a finder under section #ae7q72 and 7#c7 the issuer either did not know that such self-certification was false or did not have a reasonable basis to believe that such self-certification was false4 4 7c7 ,removal of private placement brokers from definitions of broker 7#a7 ,records and reports on monetary instruments transactions ,section #ecab of title #ca1 ,united ,states ,code1 is amended in subsection 7a77#b77;,g7 by inserting with the exception of a private placement broker as defined in section #ae7p77#d7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gho7p77#d77 before the semicolon at the end4 7#b7 ,securities ,exchange ,act of #aicd ,section #c7;a77#d7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#d77 is amended by adding at the end the following3 7,g7 ,private placement brokers ,a private placement broker as defined in section #ae7p77#d7 is not a broker for the purposes of this ,act4 4 #c4 ,limitations on ,state law ,section #ae7;i7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gho7i77 is amended-- 7#a7 by redesignating paragraph 7#c7 as paragraph 7#d72 and 7#b7 by inserting after paragraph 7#b7 the following3 7#c7 ,private placement brokers and finders 7,a7 ,in general ,no ,state or political subdivision thereof may enforce any law1 rule1 regulation1 or other administrative action that imposes greater registration1 audit1 financial recordkeeping1 or reporting requirements on a private placement broker or finder than those that are required under subsections 7p7 and 7q71 respectively4 7,b7 ,definition of ,state ,for purposes of this paragraph1 the term ,state includes the ,district of ,columbia and each territory of the ,united ,states4 4